United States District Court, D. Hawaii
STERLING G. HIGASHI, Appellant,
HALE TAKAZAWA, Appellee.
ORDER AFFIRMING THE BANKRUPTCY COURT'S: (1) ORDER
GRANTING PLAINTIFF'S MOTION FOR RULE 37(C)(2) EXPENSES;
AND (2) ORDER DENYING DEFENDANT'S OBJECTIONS TO CERTAIN
ITEMS OF PLAINTIFF'S BILL OF COSTS.
E. Kobayashi United States District Judge.
August 29, 2016, Defendant-Appellant Sterling G. Higashi
(“Appellant”) filed his Notice of Appeal and
Statement of Election (“Notice of Appeal”), [dkt.
no. 1, ] challenging the following orders issued in Adversary
Proceeding 15-90033 (“Adversary Proceeding”): (1)
Order Granting Plaintiff's Motion for Rule 37(c)(2)
Expenses (“Rule 37(c)(2) Order”), issued on
August 15, 2016; [dkt. no. 1-3 at pgs. 4-6; and (2) Order
Denying Defendant's Objections to Certain Items of
Plaintiff's Bill of Costs (“Objections
Order”), also issued on August 15, 2016 [id.
at pgs. 1-2]. The bankruptcy court filed the Certificate of
Readiness on October 13, 2016. [Dkt. no. 3.] On November 14,
2016, Appellant filed his opening brief. [Dkt. no. 7.]
Plaintiff-Appellee Hale Takazawa (“Appellee”)
filed his responsive brief on December 1, 2016
(“Appellee's Brief”), and Appellant filed his
reply on December 14, 2016. [Dkt. nos. 10, 11.] This matter
is suitable for disposition without a hearing pursuant to
Local Rule 7.2(d) of the Local Rules of Practice of the
United States District Court for the District of Hawai`i
(“Local Rules”). In an Entering Order filed on
April 26, 2017 (“4/26/17 EO”), the Court denied
the appeal and affirmed the orders of the bankruptcy court.
[Dkt. no. 14.] The instant Order supersedes the 4/26/17 EO.
The bankruptcy court's orders are affirmed for the
reasons set forth below.
background of this matter is set forth in this Court's
Order Affirming the Bankruptcy Court's Findings of Fact
and Conclusions of Law and the Judgment (“FOF/COL
Order”) in Higashi v. Takazawa, CV 16-00368
LEK-RLP, [filed 7/19/17 (dkt. no. 28), ] which arose out of
the same Adversary Proceeding. Appellee served a request for
admissions on September 25, 2015, [Appellee's App. to
Responsive Brief (“Appellee's App.”), filed
12/1/16 (dkt. no. 9), App. 4 at 29-45, ] and Appellant served
his response on October 26, 2015 [id. at 47-75].
Appellant refused to admit that he forged his wife's
signature on a promissory note related to unpaid rent on a
commercial space he used for his company. [Id. at
71.] The bankruptcy court found that Appellant forged his
wife's signature. [Appellee's App., App. 2 (Findings
of Fact and Conclusions of Law in Adversary Proceeding) at 4
(“He denies forging his wife's signature, but I do
not believe that denial.”).] The bankruptcy court held
a hearing on the motions relevant to the instant appeal on
August 5, 2016. [Id., App. 8 (Trans. of 8/5/16
hearing on Plaintiff's Motion to Approve Reasonable
Expenses Pursuant to Rule 37(c)(2); Defendant's
Opposition to Bill of Costs (“8/15/16 Hearing
Trans.”)).] With regard to Appellee's motion filed
pursuant to Fed.R.Civ.P. 37(c)(2),  the bankruptcy court
I don't think there's any dispute that the basic
elements of the rule are met. The only real dispute about -
is about whether Mr. Higashi had a reasonable ground to
believe that he might prevail on this issue of whether or not
he forged his wife's signature, basically, and I'm
inclined to say he didn't.
I mean, based on the evidence that I saw at the trial, I was
completely convinced that he did forge his wife's
signature and that he knew it. Therefore - well, in order to
accept his position, it would be like saying, well, I could
deny something in an admission, and then go ahead and lie to
the Court at the trial, and maybe the judge will accept my
lie, and that adds up to a reasonable basis for denying the
request. I just don't think that can be the law.
[Id. at 3.] At the same hearing, the bankruptcy
court also considered and rejected Appellant's objections
to Appellee's proposed bill of costs. [Id. at
Rule 37(c)(2) Order directed Appellant to pay Appellee
“$19, 662.30, as the reasonable expenses, including
attorney's fees, incurred by [Appellee] to make proof of
matters which [Appellant] failed to admit pursuant to Rule
36(a) of the Federal Rules of Civil Procedure, made
applicable to this Proceeding by Rule 7036 of the Federal
Rules of Bankruptcy Procedure.” [Rule 37(c)(2) Order at 5.]
The Objections Order directed Appellant to pay Appellee $2,
946.94 in taxable costs. [Objections Order at 2.]
Ninth Circuit has stated:
We review for abuse of discretion a Rule 37(c) award of fees
and costs. Comeaux v. Brown & Williamson Tobacco
Co., 915 F.2d 1264, 1268 (9th Cir. 1990). We will not
reverse unless we have a definite and firm conviction that
the district court committed a clear error of judgment.
United States v. Plainbull, 957 F.2d 724, 725 (9th
Cir. 1992). A district court abuses its discretion if it does
not apply the correct law or if it rests its decision on a
clearly erroneous finding of material fact. United States
v. Rahm, 99 F.2d 1405, 1410 (9th Cir. 1993).
Marchand v. Mercy Med. Ctr., 22 F.3d 933, 936 (9th
Cir. 1994) (footnote omitted). Further, this district court
has explained that, in an appeal from the bankruptcy court:
This court is sitting as an appeals court reviewing the
bankruptcy court's determination. “The decision of
the bankruptcy judge is reviewable by an Article III judge
only by an appeal governed by the same rules applicable to
appeals taken to the courts of appeals from the district
courts.” In re Mankin, 823 F.2d 1296, 1305
(9th Cir. 1987) (citing 28 U.S.C. §§ 157(b)(1),
Nauman v. Kotoshirodo (In re Nauman), Civil No.
10-00414 JMS/KSC, 2011 WL 240804, at *4 (D. Hawai`i Jan. 21,
2011). The Ninth Circuit has stated that, “[w]e review
only issues which are argued specifically and distinctly in a
party's opening brief. We will not manufacture arguments
for an appellant, and a bare assertion does not preserve a
claim, particularly when, as here, a host of other issues are